Key Highlights
- The auto parts retailer delivered earnings of $38.07 per share for Q3, surpassing analyst projections of $36.18
- Revenue climbed 8.4% from the previous year to $4.84 billion, falling slightly below the expected $4.86 billion
- Same-store sales in the U.S. increased 4.1%; company-wide comparable sales advanced 3.9% using constant currency
- Comparable sales internationally climbed only 1.6% on a constant-currency basis due to weakness in Mexican and Brazilian markets
- The retailer added 82 stores during the quarter, expanding its worldwide presence to 7,856 locations
The automotive parts specialist delivered impressive bottom-line results for its fiscal third quarter, yet shares tumbled 9.10% after revenue figures came in marginally below market expectations.
For the 12-week reporting period that concluded on May 9, 2026, the company announced diluted earnings of $38.07 per share. This figure exceeded the analyst consensus forecast of $36.18, based on data compiled from 11 analysts surveyed by Zacks.
Total revenue reached $4.84 billion, representing an 8.4% increase compared to the same period last year. Wall Street had anticipated $4.86 billion, resulting in AutoZone posting a modest revenue shortfall.
The quarter generated net income of $641.5 million. Operating profit expanded 6.6% to reach $923.8 million, elevating the operating margin beyond the 19% threshold.
The gross profit margin landed at 52.2% of sales, representing a 57 basis point decline year-over-year. Management pointed to a 77 basis point headwind from non-cash LIFO accounting adjustments as the primary factor, though this was partially counterbalanced by other positive developments.
On the expense front, operating costs as a proportion of sales improved modestly, dropping to 33.1% from 33.3% in the prior-year period. The company attributed this enhancement to revenue expansion and disciplined cost control measures.
U.S. Operations Show Resilience
Both retail and business-to-business channels posted gains in the domestic market throughout the quarter. Same-store sales across U.S. locations climbed 4.1%, while enterprise-wide comparable sales grew 3.9% when measured on a constant-currency basis.
CEO Phil Daniele noted in prepared remarks that performance remained balanced across different customer categories. The company did not provide a detailed split between retail and commercial segments.
Overseas Performance Falls Short
International comparable store sales surged 16.6% on a reported basis, though this figure contracts dramatically to merely 1.6% when currency fluctuations are excluded from the calculation.
Performance in the Mexican and Brazilian markets failed to meet management’s internal benchmarks. While Daniele recognized the underperformance, he expressed confidence that the company continues expanding its market position in both countries.
The retailer opened a net total of 82 new locations worldwide throughout the quarter. The domestic U.S. market received 57 additions, Mexico gained 20 stores, and Brazil saw five new openings. This brings the company’s global store network to 7,856 locations.
Looking at the complete fiscal year, management projects opening between 355 and 365 new stores.
Merchandise inventory increased 10.8% year-over-year to $7.56 billion, reflecting expansion strategies and inflationary pressures.
During the quarter, the company allocated $586.3 million toward share repurchases, acquiring 164,000 shares at a mean price of $3,582 per share. As the quarter closed, $804.2 million remained available under the existing buyback authorization.
